Thieves using Apple Stores to replace stolen iPhones

Acoording to a report by Reuters, Apple’s generous customer service may be causing huge problems for victims of iPhone theft. The warranty plan is tied to the iPhone and not the person who owns the phone; this means anyone can take an iPhone to an Apple Store for service or replacement.

The ease of trading in stolen iPhones and selling their replacements makes them nearly as tempting as grabbing cash. In cities from coast-to-coast, reports of iPhone thefts are common. While some thieves sell the phones through the traditional channels of fencing stolen goods, examples abound of stolen iPhones being brought back to Apple, as if broken, for either replacement or a discount on a new unit. "Apple seems to have not considered stolen devices and instead is relying on the honor system," says Robert Siciliano, a consultant for Intel Corp's technology security unit McAfee and an identity theft expert. "The honor system is devised with the mindset that we are all sheep and there are no wolves." Siciliano says he has known of this problem for a while, but doesn't see any immediate solution. "Until consumers scream loud enough about this issue, Apple probably won't do anything about it."

While this approach is fantastic for the honest iPhone owners, thieves are using Apple’s good nature to carry out a type of laundering for stolen iPhones. When a phone is reported as stolen, a carrier can blacklist it as stolen and disable it by using its device specific IMEI number. If the device has been swapped or replaced at an Apple Store, that security measure has now been bypassed. This enables a thief to sell on or use a brand new iPhone without fear of recrimination.

Apple has yet to comment on the findings within the report but let’s hope a simple solution can be found that will not cause pain for the honest amongst us. The last thing we need is for Apple to change its policies and make life more difficult when it comes to iPhone service and replacement.

But I thought that items had to be registered and if an item was taken into a store and the person taking it in could not give the correct registration details then the staff would refuse to handle it - that is what I have always been led to believe in the past.

AT&T put my IMEI on what they called the 'Negative List' in February. They told me the phone could no longer be activated on their network. My iPhone was just swapped out by Apple this past week. Really Apple? Get your $#!+ together. This problem is totally Apple's fault.

In the Apple store here in the UK I see a lot of of the same customers using credit cards to buy gift cards then using those gift cards to buy multiple iPhones, they have friends to get 2 each and end up walking out the store with over 12 iPhones all together. Surely something's going on there!?

Easy solution would be for Apple to suck it up and reach out to the carriers. A simple call to the carrier to verify ownership should resolve this problem. If the person bringing the phone in is not listed on the account, then they don't get serviced.

That will never work. Many people buy them second-hand off Craigslist or Ebay and they don't get registered as owners. There's no way that the Carrier and Apple could keep up with this and it would kill the used Smartphone market.

Sounds like you are a theif, or you have never had someone steel your Credit Card Info and buy a phone at an Apple Store and then have Apple tell you you cannot register the phone that was bough on your account. I thought I loved Apple, but their stance on this sucks and show a lack of concern for they honest customers. SHAME ON APPLE for allowing stolen phones to be covered under warranty. APPLE CUSTOMER NO SERVICE SUCKS!

This is bad for the consumer or Apple? Once the swap is made, can't Apple then check the IMEI and see it as stolen? The person gets their phone back and the thief gets a new one (not that this is how it works but it could / should). I like this better than never seeing my phone again. and if Apple keeps any record of the swapped phone then, they might be able to catch someone before or after selling to unsuspecting buyer?

Requiring a police report to be filed before processing a phone as stolen would solve the problem of pranks nicely enough.
Sure, you might have a bit of inconvenience while you prove that your phone is your phone, your friend can rejoice over that as they sit in jail for filing a false police report and lying under oath.

This isn't rocket science... Apple stores need to just check the blacklists before doing an exchange. Pretty simple really... that is unless the phone doesn't work. Yet another reason the iPhone should have a removable battery compartment. But really, the tech staff there should be able to take the cover off and check the numbers inside. What Apple should do is laser etch the serial and IMEI numbers into the side of the case in very small print. Something that's hard to read with the naked eye easily and requires a magnifying glass to see. That way it's still secure for everyday use in public if you don't have case but still very easy for someone to check it if they do an exchange with a private person or in the store. Why the f can't Apple think of stuff like this? lol

I call shenanigans , most iPhone users are a bit more tech savy about technology than your typical cell phone user and now with iOS4 & 5 you have the ability to remote lock your phone , you can also call AT&T and have them lock your IMEI , this should trigger the Apple genius as this is a stolen phone . I think Reuters needed a store today .

I'm sorry, but that isn't quite accurate. Far from it actually. Having to work with iPhone users on almost a daily basis, I can tell you that they know almost nothing about their phones besides how to call, text, take a picture(dare I say, selfie!) or open their favorite social networking app. Next time you come across an average iPhone user, ask them to show you on the phone what the serial number is, or how to turn on or off siri or find my iphone without searching through every menu under settings. Chances are really high they won't be able to do it.

Not trying to start anything. Just saying in my experience, iPhone users know no more about technology on average than anyone else.

Listen. don't give apple an excuse not to repair or exchange a phone, like someone posted " craigslist " you buy an iphone. 2 weeks later its not working properly, you would want to be able to do get it repaired at no charge right..! what people need to do is safe guard there iPhones. Stop walking around as if you are oblivious to how valuable your iPhone is. would you walk around flaunting diamonds..NO so act like your phone is made or gold and stop being careless. Apple has a perfect customer service no headaches. don't comlpicate things

Right. People shouldn't be careless, waving their iPhones about like no one out there wants to steal it. But the people who get mugged with a gun to the back of their head like I just did a couple of days ago shoudn't be blamed for getting their iPhone stolen, especially when you don't take out your phone the entire time you're outside.

A simple blacklist for will not work. Anyone could easily call it in as stolen, such as an angry girlfriend/boyfriend or spouse.
The iPhone setup process on iOS 5 is pretty simple, and could easily allow you to put in your drivers license to register the device before you get the phone working. Or even the existing credit card on your iTunes account when you sign in with your Apple ID.

To start off with, you'd only be allowed to report iPhones that are associated with your Apple account as stolen. That means anyone who has used iCloud, downloaded an app (free or paid), bought a song, or registered with iTunes will be able to report their own phone stolen.
You combine that with requiring a police report to actually file, raising the stakes of a false report from "This will be funny, hope he's not too mad" to "Jail for filing a false police report, unlawful access to a computer, perjury"
The result would be that a stolen iPhone is worthless since it cannot be activated, upgraded, factory reset or warrantied. Combine that with iCloud's "Find my iPhone" giving the true owner the ability to reset the device remotely (and the device would then be unactivateable, so completely worthless) and you'd have a system that works.
As for handling legitimate used sales, it would be possible to release a device with a new button in the OS and/or a web form that would release ownership (in other words, it would prevent the previous owner from declaring their device stolen).
You could also automatically release devices 14 days after they're registered against a new Apple account. Two weeks will generally be enough for most people to notice their phone was stolen, make a phone call to the police and then notify Apple, but it will also give you some confidence after buying a phone that it won't stop working 3 months later.
This requires Apple to care, of course, and their only current motivation to do so is that if they warranty a stolen phone, they legally have to return the original to the original owner (or face possession of stolen property and larceny charges) while the new device is now out of their hands.
OTOH, from a marketing point of view, this would be huge and would probably shake up the industry a little, especially if presented as a "many phone carriers in the world block stolen devices. US carriers don't, so we're doing it for you"

I just went through all of this. Cliff notes: Oct 19th, phone stolen. Sent remote wipe and filed a police report. Also called apple and reported the serial number stolen. Was told by both Apple and AT&T that they would not disable the phone. December 27th got the email that remote wipe was successful. January 12th got an email receipt from the local apple store saying the phone had been replaced (reason for replacement was sound cut out during call and couldn't be duplicated according to the notes). Called Apple but was told I would have to have the police deal with their loss prevention dept. Sent a bunch of info to the police and they ended up picking up my turned in phone from the apple store. I later picked up my phone from the police property division. Total time from the Apple email to me picking up the phone was only 10 days.
From searching this same story is very common. Most don't get the phone back and definitely not as quick as I did.

The quick workaround is to give Apple the ability to call the carriers - claim who they are and then have them check the IMEI numbers. Or simply - all they have to do is call a store (Verizon, AT&T, Sprint) and ask to verify the numbers.
I've worked for these companies. You can call and check an ESN without having to give any information. If I bring up an ESN to see if it's stolen or blocked for some reason - I don't see any user information. All I see is Yes, it's reported as stolen or No, it's fine.
It's simple - and they can do it in those few minutes they take the phone back to the back room to see what they can do. In fact, having done that once - I assumed that's what they WERE doing.

I work at an apple store and I have to say that this article is pretty ridiculous. Apple, or at least the store I work in, does not simple "Swap the phones out". There's a long verification process where the purchase is brought up on the easypays if it was recent, the apple ID is verified and used to back up the phone, and most importantly, we never replace a phone unless there is a legitimate reason to do so (the phone is broken, has a software issue, etc) and only if there are no signs of tampering whatsoever. I cannot think of any way in which a stolen phone would simply be "swapped out" unless the thief had access to the person's credit card, drivers license and looked a good deal like the person in question.

You are mistaken because exactly how this article explained it is exactly what happened to me. When I was on the phone with Apple, they told me they didn't care, they treated the phone in respect to it's warranty, irregardless of who brought it in. Apple needs to fix this problem.

I'm still a little bit confused after reading the comments placed here, I am looking at getting an iPhone 4s and have been offered a brand new one in a sealed box quite cheap. I have been told it is an unwanted upgrade and £500 for a 64gb seems too good to be true.
My question is, how do I know if it's stolen or not? Are there any records I can check it against before purchase using the imei number or similar?
I am in the uk if that makes any difference?!
Many thanks!

My iPhone was stolen in February. I reported it stolen. I called AppleCare and canceled the extended warranty. Yesterday, I received a copy of the receipt that someone took my stolen phone into the Apple Store complaining of a problem. They ran the serial number but did not ask the thief for the account number to which it is registered. Thief now has access to my name and my account!!!

Ha thanks. You have resurrected another iPhone with this article. I thought it was over, another piece of junk that got consumed by the blacklist plague. You kind sir have found the cure for this young iPhone who has barely even seen light from outside the box that it was born into this world in. I be no wolf just a black sheep who swindled a wolf for this fallen phone. But once again you my friend have made this
Master piece I call a Steve Jobs phone to be born to fulfill its role in my hands the way it was designed too. Thank you kind sir.

Well I have today had an email from apple asking for feedback from me regarding my recent 'repair'. I reported my iPhone stolen to police and Vodafone to blacklist it in January this year when it was stolen. Apple have 2 weeks ago issued a replacement phone to whoever stole my phone...I knew nothing of this til I got the request for feedback from apple. Apple are refusing to give me more information about who requested the replacement etc even though I have proof of purchase for my old handset. Ridiculous! Needless to say the police are chasing this up. I find it extremely disappointing that apple have done this even though I set it to lost mode and remotely wiped it too; I don't think I could have done more to make it clear it was stolen/blacklisted. Apple need to change this ridiculous policy...when else can you replace something locked because it has been reported stolen with such ease? Does anyone know my rights with regard to apple's liability here? Thanks.

This is exactly what happened to me and my iPhone. All Apple had to do was check the phone registration in their own system or the cell phone industry's negative list. Apple should be held liable and they need to fix this problem. And, now that I know Apple now has my stolen property, I can not get anyone at Apple to talk about returning it to me. Really Apple? I expect more from you on this. Your customer service on this is a total failure.

I bought an iPhone 4 from a friend in good shape & I'm on the straight talk plan and I was going to make the iPhone a straight talk plan so I bought a memory card and went to program it and when I called AT&T they said the phone was reported stolen. So I guess the person I bought it from stole it, we'll that person moved to I don't know where so know I'm stuck with this iPhone I payed $80 for is there any way I can unlock it or something so I can use it?

hey guys. i buy an iphone 5 from Gambia in march 2014 its from France orange. Now today i get to know that this iphone is reported stolen. WTF. I paid 350$ for this iphone.
What in my mind comes now is the owner of the phone sell this phone to me and after he reported it as stolen and get the insurance claim.

Guys the owners if do this what will do than to them please tell me. i wasted my $ 40 for unlocking it too now.
Its not fair enough.
and now i want to find the owner but i am helpless to find him, anyone know how to contact the owner please do reply. at inshubhandari@gmail.com